Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

3. Accrual Accounting Concepts

Introduction to Adjusting Journal Entries and Prepaid Expenses

Financial Accounting

3. Accrual Accounting Concepts

Introduction to Adjusting Journal Entries and Prepaid Expenses

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Multiple Choice

In activity-based absorption costing, which of the following is used to assign overhead costs to products?

Direct labor hours only

Estimated sales volume

A single plant-wide overhead rate

Cost drivers based on activities performed

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Verified step by step guidance

Understand the concept of activity-based absorption costing: This method allocates overhead costs to products based on the activities required to produce them, rather than using a single plant-wide rate or direct labor hours.

Recognize the role of cost drivers: Cost drivers are factors that cause overhead costs to be incurred. Examples include machine hours, number of setups, or inspection hours, depending on the activities performed.

Identify why direct labor hours or a single plant-wide overhead rate are insufficient: These traditional methods may not accurately reflect the actual consumption of resources by different products, especially in complex manufacturing environments.

Learn how cost drivers are determined: Analyze the activities performed during production and identify measurable factors (cost drivers) that correlate with the overhead costs incurred for each activity.

Understand the assignment process: Overhead costs are assigned to products based on the extent to which each product uses the identified cost drivers, ensuring a more accurate allocation of costs.